Buyers hope to get more discounts

NEW DELHI, Dec. 17 -- End users are expecting discounts and hoping that white money has more currency in the current scenario. Decisionmaking may be slow, but actual users are still around, say real estate experts.
Khushru Jijina, managing director, Piramal Fund Management, believes that in the near term, demonetisation is likely to further impact an already muted buyer sentiment across most major markets. This is likely to be reflected across both velocity and pricing, albeit in a more limited way for Tier -1 cities and end-user affordable housing when compared to the smaller towns and cities and the luxury segment.
"However, we believe that the medium to long term impact of demonetisation is largely positive especially for the end-user and for financial investors such as ourselves. We have already seen this trend reflected in the immediate aftermath of demonetisation even as sales of well planned, well executed and well-priced residential units continue to take place. Coupled with RERA, this actually fast tracks the 'institutionalisation' of a sector that has already been consolidating. Given the immediate impact on sentiment, markets will likely normalise over a three to six month period as we believe that Tier-1 developers and those who already embraced investment grade processes and governance standards will emerge stronger and the average/smaller/speculative developers will be forced to consolidate quicker than otherwise expected."
The market is in reset mode and demonetisation is only going to transform it into an efficient end-user market. Post demonetisation, there have been cases of some developers escalating prices and accepting some portion of the payment in cash. "Most cancellations have been from investors who are now desperate to get out of deals signed earlier. As many as 35% are cancelling deals signed earlier in cases where the cash element deployed was huge, especially in case of plotted developments and resale properties," says Pankaj Kapoor of Liases Foras.
Published by HT Syndication with permission from Hindustan Times.